APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA.
Seitz, Chief Judge, Van Dusen, Aldisert, Adams, Seitz, Chief Judge, Van Dusen, Aldisert, Adams, Gibbons, Rosenn, Hunter, Weis, and Garth, Circuit Judges. Adams, Gibbons, Hunter, Circuit Judges. Seitz, Chief Judge, with whom Circuit Judge Aldisert joins, concurring and dissenting in part.
This appeal concerns the validity under the due process clause of the Fourteenth Amendment of two aspects of Pennsylvania law: first, a common law rule which gives automobile repairmen a possessory lien on vehicles they have repaired, and second, statutes which permit repairmen to sell vehicles retained under that lien. The district court held that state action is not involved when private repairmen retain or sell vehicles pursuant to these laws. It therefore granted summary judgment in favor of the defendants (private garages and repairmen) and against the plaintiffs, who are aggrieved car owners. We have concluded that the district court was correct in holding that mere retention of the vehicles by the defendants did not involve state action but that the district court erred in reaching the same result with respect to a vehicle which, under Pennsylvania's statutes, could have been sold by one of the defendants. In this latter instance, we have also concluded that the Pennsylvania statutes authorizing such a sale violate due process.
Pennsylvania common law gives a repairman a lien on those items which he repairs and permits him to retain possession of them until payment is made for the work performed. Wilson v. Malenock, 128 Pa. Super. 544, 194 A. 508 (1937). Pennsylvania statutes permit a repairman whose bill is not paid to sell those items retained under his common law lien in order to satisfy the amount of the lien. Pa. Stat. Ann. tit. 6, §§ 11-14 (1963).*fn1
The five plaintiffs in this case are Pennsylvania residents whose motor vehicles were retained by private repairmen when the plaintiffs refused to pay the amounts which the repairmen claimed that they owed for repairs. One of the plaintiffs, Gilbert Parks, eventually paid the amount demanded and regained possession of his automobile. Another, Lewis Williams, regained possession of his vehicle through agreement of counsel after this action was initiated. That car is no longer in Williams's possession. Two of the plaintiffs, Hattie Ellerbe and William Muldowney, Jr., never regained possession of their vehicles but have now abandoned them as worthless. These four plaintiffs have live claims under 42 U.S.C. § 1983 (1974)*fn2 based on the allegedly unconstitutional retention of their vehicles by particular defendants. They maintain that the repairmen who retained their vehicles acted "under color of" Pennsylvania law and that the repairmen's conduct violated their due process rights under the Fourteenth Amendment.
The fifth plaintiff, Lois Dillon, regained possession of her automobile under a court order "pending the final disposition" of this case.*fn3 Since the garage's lien on her vehicle apparently was not extinguished under Pennsylvania law when the garage surrendered possession in compliance with the court order, Bernstein v. Hineman, 86 Pa. Super. 198, 201 (1925), Pennsylvania law would permit the garage, should it ever regain possession of the Dillon car, to sell it in satisfaction of its lien. Dillon, therefore, has a present claim for relief enjoining the sale of her car by the lienholder, as well as a claim for damages based on the retention of her car pursuant to the lien. In asserting these claims, Dillon argues that a private repairman who retains or sells his customer's car acts "under color of" Pennsylvania law and that the provisions which permit him to do so do not comport with due process requirements.
The district court concluded that neither the retention nor the sale of a customer's car by a private repairman was action "under color of" Pennsylvania law, and it therefore granted summary judgment in favor of the defendants and against each of the plaintiffs. Parks v. "Mr. Ford ", 386 F. Supp. 1251 (E.D. Pa. 1975). This appeal followed.*fn4
We are not persuaded that the retention of plaintiffs' vehicles by the defendants pursuant to Pennsylvania's common law garageman's lien constitutes action "under color of" state law as required by 42 U.S.C. § 1983.*fn5
In Magill v. Avonworth Baseball Conference, 516 F.2d 1328, 1330-31 (3d Cir. 1975), this Court identified three general categories of state action cases: "(1) where state courts enforced an agreement affecting private parties; (2) where the state 'significantly' involved itself with the private party; and (3) where there was private performance of a government function." See also Hollenbaugh v. Carnegie Free Library, 545 F.2d 382, 383 (3d Cir. 1976). Cf. Jackson v. Metropolitan Edison Co., 483 F.2d 754, 757 (3d Cir. 1973), aff'd 419 U.S. 345, 42 L. Ed. 2d 477, 95 S. Ct. 449 (1975). Retention*fn6 of the plaintiffs' vehicles by the defendants does not fall within any of these three groups.
It is evident that we are not here concerned with a case in which "state courts enforced an agreement affecting private parties," since the defendants never invoked the assistance of the state courts to enforce their liens.*fn6a Compare Barrows v. Jackson, 346 U.S. 249, 97 L. Ed. 1586, 73 S. Ct. 1031 (1953) (state court judgment for damages for violation of racially restrictive covenant is state action); Shelley v. Kraemer, 334 U.S. 1, 92 L. Ed. 1161, 68 S. Ct. 836 (1948) (state court injunction to enforce racially restrictive covenant is state action). See also Evans v. Abney, 396 U.S. 435, 24 L. Ed. 2d 634, 90 S. Ct. 628 (1970) (no state action where state court refused to use doctrine of cy pres to excise racial restriction from trust but held instead that trust had failed and reverted to heirs of settlor).
Nor are we persuaded that this is a case in which "the state [has] 'significantly' involved itself with the private party." Pennsylvania has neither compelled nor coerced the defendants to retain possession of the plaintiffs' vehicles. Compare Adickes v. S. H. Kress & Co., 398 U.S. 144, 172, 26 L. Ed. 2d 142, 90 S. Ct. 1598 (1969) (dicta that action pursuant to custom having the "force of law" would be state action); Robinson v. Florida, 378 U.S. 153, 12 L. Ed. 2d 771, 84 S. Ct. 1693 (1964) (manager's request that integrated group leave restaurant was state action where state regulations put special burdens on facilities serving both races); Lombard v. Louisiana, 373 U.S. 267, 10 L. Ed. 2d 338, 83 S. Ct. 1122 (1963) (manager's request that integrated group leave restaurant was state action where state officials commanded or coerced him to do so); Peterson v. Greenville, 373 U.S. 244, 10 L. Ed. 2d 323, 83 S. Ct. 1119 (1963) (manager's request that blacks leave restaurant was state action where integrated facilities were forbidden by ordinance).
None of the defendants was "a willful participant in joint activity with the state or its agents." Compare United States v. Price, 383 U.S. 787, 794, 16 L. Ed. 2d 267, 86 S. Ct. 1152 (1966) (state action where private individuals conspired with state officers to murder civil rights workers). In fact, state officials did not even perform ministerial functions in connection with the defendants' retention of the plaintiffs' vehicles. Compare North Georgia Finishing, Inc. v. Di-Chem, Inc., 419 U.S. 601, 42 L. Ed. 2d 751, 95 S. Ct. 719 (1975) (court clerk issued writ of replevin); Mitchell v. W. T. Grant Co., 416 U.S. 600, 40 L. Ed. 2d 406, 94 S. Ct. 1895 (1974) (judge ordered issuance of writ of sequestration); Fuentes v. Shevin, 407 U.S. 67, 32 L. Ed. 2d 556, 92 S. Ct. 1983 (1972) (court clerk issued writ of replevin); Sniadach v. Family Finance Corp., 395 U.S. 337, 23 L. Ed. 2d 349, 89 S. Ct. 1820 (1969) (court clerk issued summons of garnishment); Kacher v. Pittsburgh National Bank, 545 F.2d 842 (3d Cir. 1976) (involving Pennsylvania replevin procedures declared unconstitutional in Fuentes). The state is not in a "position of interdependence" or a "symbiotic relationship" with the garagemen, since it did not and could not derive any benefit from their decision to retain plaintiffs' vehicles. Compare Burton v. Wilmington Parking Authority, 365 U.S. 715, 6 L. Ed. 2d 45, 81 S. Ct. 856 (1961). See Jackson v. Metropolitan Edison Co., 419 U.S. 345, 357-59, 42 L. Ed. 2d 477, 95 S. Ct. 449 (1975); Moose Lodge No. 107 v. Irvis, 407 U.S. 163, 174-77, 32 L. Ed. 2d 627, 92 S. Ct. 1965 (1972). Cf. Braden v. University of Pittsburgh, 552 F.2d 948 (3d Cir. 1977) (denial of University's motion to dismiss for want of state action was correct).*fn6b
Contrary to the plaintiffs' suggestion, we are not convinced that this case is comparable to Reitman v. Mulkey, 387 U.S. 369, 18 L. Ed. 2d 830, 87 S. Ct. 1627 (1967), or Hunter v. Erickson, 393 U.S. 385, 21 L. Ed. 2d 616, 89 S. Ct. 557 (1969). In Reitman, the Supreme Court held that California had become involved in the discriminatory acts of private individuals when it enacted a constitutional amendment which not only repealed existing open housing legislation but also prohibited the governor, the legislature, and all agencies and subdivisions of the state from limiting in any way the right of private individuals to discriminate in the sale or rental of real property. See Black, Foreward: "State Action," Equal Protection, and California's Proposition 14, 81 Harv. L.Rev. 69, 75 (1967). In Hunter, the Supreme Court reached a similar result where, after the Akron, Ohio, city council had enacted an open housing ordinance, the voters amended the city charter to require any such ordinance to be approved by referendum.
Reitman and Hunter are readily distinguishable from the instant case. The private activity with which we are here concerned does not involve racial discrimination and therefore, like many of our sister circuits, we do not find the analysis in Reitman and Hunter controlling. Anastasia v. Cosmopolitan National Bank of Chicago, 527 F.2d 150, 155 (7th Cir. 1975) (hotelkeeper's lien); Turner v. Impala Motors, 503 F.2d 607, 611 (6th Cir. 1975) (self-help repossession of automobiles); Fletcher v. Rhode Island Trust National Bank, 496 F.2d 927, 931 (1st Cir. 1974) (banker's right to set-off customer's debts against customer's deposits); James v. Pinnix, 495 F.2d 206, 208-09 (5th Cir. 1974) (self-help repossession of automobiles); Shirley v. State National Bank of Connecticut, 493 F.2d 739, 744-45 (2d Cir. 1974) (self-help repossession of automobiles) (2d Cir. 1974); Adams v. Southern California First National Bank, 492 F.2d 324, 333 (9th Cir. 1974) (self-help repossession of automobiles). To paraphrase the First Circuit's words in Fletcher, "We question if a case forged from the nation's continuing struggle with the cancer of racial discrimination can in every particular be transferred to one dealing with" garagemen's liens.*fn7 Further, Reitman and Hunter involved governmental actions which sought to shield private racial discrimination from legislative or administrative redress. Here, the lien in question is subject to repeal or modification by the ordinary legislative or judicial processes.
Neither are we convinced that this is a case involving "the exercise by a private entity of powers traditionally exclusively reserved to the State" or "traditionally associated with sovereignty." Jackson v. Metropolitan Edison Co., 419 U.S. 345, 352-53, 42 L. Ed. 2d 477, 95 S. Ct. 449 (1975). Plaintiffs argue that the retention of their cars by the defendants constitutes state action because the Commonwealth delegated to the garagemen a part of its sovereign power with respect to "conflict resolution." Brief for Appellants at 15. They explain:
This is the power to determine ex parte precisely what amount is owed, and to utilize a summary attachment and execution procedure to enforce this determination. It is submitted that the law and statutory scheme challenged, then, places the power of the state behind the repairman and render his conduct 'state action' within the meaning of that term in the fourteenth amendment.
We considered and rejected a virtually identical argument in Gibbs v. Titelman, 502 F.2d 1107 (3d Cir. 1974), cert. denied sub nom. Gibbs v. Garver, 419 U.S. 1039, 42 L. Ed. 2d 316, 95 S. Ct. 526 (1974), in which we held that self-help repossession of automobiles under §§ 9-503, 9-504 of the Uniform Commercial Code did not involve state action. In Gibbs the district court had held that there was state action because the state had delegated to the repossessors its sovereign "power to decide that your rights are greater than another's." Gibbs v. Titelman, 369 F. Supp. 38, 48 (E.D. Pa. 1973).
"This power," it wrote, "has no less an impact on the person whose goods are taken when the state does not compel that the power be used." Id. We rejected that argument out of hand. 502 F.2d at 1107, 1114. Faced with a strikingly similar argument in Davis v. Richmond, 512 F.2d 201, 204-05 (1st Cir. 1975) (retention of property pursuant to boardinghouse keeper's lien not state action) the First Circuit reached the same result:
Plaintiff's 'public function' argument boils down to an assertion that it is inherently a governmental responsibility to resolve disputes before permitting any deprivation of property. But as already suggested, in either a state of nature or an organized society without an applicable law, a boardinghouse keeper might reasonably assert the right to hold a guest's property within the premises until the rent is paid. A keeper does not need assistance from the state to take and hold property within the premises: self-help is readily available. We said in Fletcher, supra, 496 F.2d at 930.
'Whatever the truth of the old saw that possession is nine-tenths of the law, a creditor who holds something of value to his debtor is differently situated from one who does not: he does not need the state to facilitate his collection efforts.'
We believe that Gibbs and Davis correctly dispose of plaintiffs' argument. Initially, as in Gibbs, supra, at 1114, we believe that the ancient origin of the challenged activity is highly relevant. While we acknowledge that state action issues ought not to turn solely upon whether the right asserted has common law origins,*fn8 when private individuals engaged in a particular activity long before the enactment of the Fourteenth Amendment, that circumstance is strong evidence that the activity in question is not one " traditionally exclusively reserved to the State."*fn9 Anastasia v. Cosmopolitan National Bank of Chicago, supra, at 156; Barrera v. Security Building & Investment Corp., 519 F.2d 1166, 1172 (5th Cir. 1975); Gibbs v. Titelman, supra, at 1114; Shirley v. State National Bank of Connecticut, supra, at 745; Adams v. Southern California National Bank, supra, at 337.
In this case, it is clear that Pennsylvania recognized an artisan's lien on property he had repaired or improved long before 1868. In McIntyre v. Carver, 2 Watts. & Serg. 392, 37 Am. Dec. 519 (Pa. 1841), the Pennsylvania Supreme Court held that a carpenter to whom doors were delivered to be finished had a common-law lien which attached to them for the value of his labor. The court wrote: "It is not to be doubted that the law of particular or specific lien on goods in the hands of a tradesman or artisan for the price of work done on them, though there is no trace of its recognition in our books, was brought hither by our ancestors; and that it is part of our common law." Id. at 395.
Finally, even if the antiquity of Pennsylvania's garagemen's lien is not considered, we simply are not satisfied that a garageman exercises a power traditionally reserved exclusively for the sovereign when he refuses to release his customer's vehicle until he is paid. The contrast between the situation here and the situation in which the Supreme Court has found state action because sovereign powers were delegated is striking. Unlike the power of eminent domain, Jackson v. Metropolitan Edison Co., supra, at 353 (dicta), the power to control the electoral process, Nixon v. Condon, 286 U.S. 73, 76 L. Ed. 984, 52 S. Ct. 484 (1932), Terry v. Adams, 345 U.S. 461, 97 L. Ed. 1152, 73 S. Ct. 809 (1953), the power to regulate activities permitted in the streets, Marsh v. Alabama, 326 U.S. 501, 90 L. Ed. 265, 66 S. Ct. 276 (1946),*fn10 or the power to regulate access to public parks, Evans v. Newton, 382 U.S. 296, 15 L. Ed. 2d 373, 86 S. Ct. 486 (1966), a garageman's "power" or right to retain the cars of customers who have not paid their bills is an essential attribute of possession, not of sovereignty.
In sum, we have determined that private action pursuant to the Pennsylvania garagemen's lien is not "state action" or action "under color of" state law, since it does not fall within any of the three categories of state action identified in Magill v. Avonworth Baseball Conference, supra.*fn10a Accord, Phillips v. Money, 503 F.2d 990 (7th Cir. 1974) (private action under Indiana garagemen's lien not state action).*fn11
Plaintiff Dillon's claim for injunctive relief against the sale of her automobile pursuant to Pa. Stat. Ann. tit. 6, §§ 11-14 (1963) stands on an entirely different footing. The Commonwealth's statutory scheme may be briefly summarized as follows. A garageman who retains a vehicle under his common law lien may sell the vehicle if his bill is not paid within thirty days after he has properly notified the owner of the amount due. Pa. Stat. Ann. tit. 6, § 11 (1963). The notice must be written and must contain a verified and itemized statement of the services performed. Pa. Stat. Ann. tit. 6, §§ 11-12 (1963). If the owner does not pay the bill or cause a writ of replevin to be issued within thirty days after receiving the garageman's notice, the garageman may proceed with the sale "in the same manner as personal property is sold by a sheriff or constable." Pa. Stat. Ann. tit. 6, § 12 (1963). The sale is "as conclusive to the title conveyed as if sold by a sheriff or constable." Pa. Stat. Ann. tit. 6, § 14 (1963). After satisfying the amount of the lien and his own costs, the garageman must pay the remainder to the owner upon demand or, if the owner does not demand those funds, to the county treasurer. Pa. Stat. Ann. tit. 6, § 13 (1963).
In contrast to our view that state action is not present when a vehicle is retained under the common law lien, we believe that state action is present when a garageman sells a customer's vehicle under the statutory scheme just described. First, the garageman's power to sell property retained under his common law lien, unlike the lien itself, was not authorized prior to the enactment of the statute in 1925*fn12 and arises solely from that legislation. Pub. L. No. 557, § 1 (May 7, 1925). The statute not only extended the power of sale to the garageman but also directed him to follow the same procedures employed by a sheriff or constable. In addition, the statute decreed that the effect of the sale was to be as conclusive as that of a sheriff or constable. By thus authorizing sales to take place, directing how they are to be carried out, and giving them the effect of judicial sales, Pennsylvania has quite literally delegated to private individuals, powers "traditionally exclusively reserved" to sheriffs and constables. In our view, that grant of power has the same effect for state action purposes as if Pennsylvania had endowed private individuals with the same authority to arrest suspects and to execute warrants as state and local police possess. Cf. Griffin v. Maryland, 378 U.S. 130, 12 L. Ed. 2d 754, 84 S. Ct. 1770 (1964). As a result, we have no doubt that state action exists when a garageman sells a customer's vehicle pursuant to Pa. Stat. Ann. tit. 6, §§ 11-14.
In holding that state action is inherent in sales conducted under the Pennsylvania statutory scheme, we do not rely at all upon the fact that state employees in the Bureau of Motor Vehicles, upon receipt of a proper application from a garageman who has foreclosed on his lien, issue a certificate of title for the vehicle in the garageman's name. We recognize that garagemen would be effectively prevented from foreclosing on their liens if state employees did not perform this service. See Pa. Stat. Ann. tit. 75, § 201(a)(1971). But we adhere to our holding in Gibbs that this minor involvement by state officials is not sufficient to transform essentially private transactions into state action. 502 F.2d at 1113 n.17. The purpose for the Commonwealth's participation is "to protect innocent purchasers of motor vehicles, to protect the public by affording identification of vehicles and to keep records current." Shirley v. State National Bank of Connecticut, supra, at 743 n.5. If the role played by state employees in issuing new certificates of title to garagemen who foreclose on their liens were enough to infuse those foreclosures with state action, then obviously there would be state action as well whenever a new or used car is purchased and a new certificate of title is issued. By the same logic, the service which state employees perform in recording deeds and mortgages would seem to inject state action into virtually every real estate transaction. Id.; Burke & Reber, supra, at 19-23. We do not believe that any of these essentially private transactions, which number in the millions each year, may be said to constitute state action simply because state employees participate in the negligible role of recordkeepers.
Because we have determined that state action is present when a private repairman sells a customer's vehicle pursuant to Pennsylvania's statutes, those statutes must be measured against Fourteenth Amendment due process standards. Since such a determination involves no questions of fact and since a determination that due process was satisfied would constitute a basis upon which the district court's grant of summary judgment could be affirmed,*fn13 we turn to that question.
We believe that the Pennsylvania statutes under which a repairman may sell a customer's motor vehicle to satisfy his common-law lien, Pa. Stat. Ann. tit. 6, §§ 11-14 (1963), do not meet the due process requirements articulated by the Supreme Court. See North Georgia Finishing, Inc. v. Di-Chem, Inc., 419 U.S. 601, 42 L. Ed. 2d 751, 95 S. Ct. 719 (1975); Mitchell v. W.T. Grant Co., 416 U.S. 600, 40 L. Ed. 2d 406, 94 S. Ct. 1895 (1974); Fuentes v. Shevin, 407 U.S. 67, 32 L. Ed. 2d 556, 92 S. Ct. 1983 (1972); Sniadach v. Family Finance Corp., 395 U.S. 337, 23 L. Ed. 2d 349, 89 S. Ct. 1820 (1969). See also this Court's analysis of these precedents in Jonnet v. Dollar Savings Bank of the City of New York, 530 F.2d 1123 (3d Cir. 1976).
It is not an easy task to extract clear rules from the Supreme Court cases cited above. The current status of Fuentes is unclear in light of North Georgia Finishing, Inc. v. Di-Chem, Inc., supra, and Mitchell v. W.T. Grant, supra. However, even if we were to ignore Fuentes, it seems evident that the Pennsylvania statutes at issue in this case do not pass muster when tested by the due process standards expressed in the Supreme Court's two most recent cases: Mitchell v. W.T. Grant Co., supra, and North Georgia Finishing, Inc. v. Di-Chem, supra.
In Mitchell, the Supreme Court approved Louisiana's sequestration procedures, which "(1) required a creditor to file an affidavit stating 'specific facts' entitling him to sequestration; (2) mandated that the writ was issuable only by a judge; (3) required the creditor to file a bond to protect the debtor from all damages in the event the sequestration was shown to have been wrongful; (4) entitled the debtor to dissolve the sequestration by filing his own bond; and (5) entitled the debtor to an immediate hearing after seizure and to dissolution of the writ absent proof by the creditor of the grounds on which the writ was issued." (Footnote omitted).*fn14
In North Georgia Finishing, Inc., the Court held that Georgia's prejudgment garnishment procedures were constitutionally insufficient because "(1) they allowed a writ of garnishment to issue on affidavit by a creditor or his attorney containing only conclusory allegations; (2) the writ was issuable by the court clerk without participation by a judge; (3) the garnishment could be dissolved only by the filing of a bond, which continued to deprive defendant of the use of some property; and (4) there was no provision for an early hearing at which the creditor would be required to demonstrate at least probable cause for the garnishment."*fn15
The Pennsylvania statutes challenged here display few of the "saving characteristics"*fn16 of the provisions sustained in Mitchell and exhibit many of the objectionable characteristics of the provisions struck down in North Georgia Finishing, Inc. Under the statutes at issue in this case, a garageman who wishes to sell a customer's vehicle must serve the owner with written notice and a verified, itemized statement of the services performed and the amount demanded. However, once the notice has been served and thirty days have elapsed, he may proceed with the sale without first obtaining judicial authorization, without filing a bond, and without providing a hearing at which the customer has the opportunity to challenge the amount charged and due.
A vehicle owner, on the other hand, can prevent a threatened sale only by initiating an action in replevin and posting a replevin bond. If the owner cannot post the bond or if he does not commence an action in replevin for any other reason, he is not afforded a hearing before the sale occurs.
Moreover, the statutes challenged here have other serious flaws. Unlike the prejudgment garnishment statutes struck down in North Georgia Finishing, Inc. and Sniadach or the sequestration procedures approved in Mitchell, the statutes at issue here result in a permanent, not a temporary, deprivation of property. This factor standing alone is particularly significant, since (1) the garageman need not file a bond to protect the vehicle owner, (2) the vehicle will typically be sold for a price well below its market value, and (3) any vehicle, no matter how valuable, may be sold to satisfy any repairman's lien, no matter how small. When all these factors are considered, it is plain that these statutes violate Fourteenth Amendment due process.*fn17 As a consequence, defendant North Penn Motors, Inc., which continues to hold a common-law lien on plaintiff Dillon's car, must be enjoined from selling her automobile pursuant to those statutes.
We therefore will affirm the district court's order insofar as it grants summary judgment against the four plaintiffs whose claims arise solely from the retention of their vehicles. We will reverse the district court's order insofar as it grants summary judgment against the one plaintiff, Lois Dillon, whose claims implicate the Commonwealth's ...